Assembly Bill A11133

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  11133

                          I N  A S S E M B L Y

                              May 19, 2010
                               ___________

Introduced by M. of A. CASTELLI -- read once and referred to the Commit-
  tee on Aging

AN ACT to amend the elder law, the tax law and the state finance law, in
  relation  to  establishing  various  long  term care savings plans and
  providing certain tax credits; and providing for the  repeal  of  such
  provisions upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The elder law is amended by adding a new article 4 to  read
as follows:
                                ARTICLE IV
                     LONG TERM CARE SAVINGS ACCOUNTS
SECTION 401. DEFINITIONS.
        402. LONG TERM CARE SAVINGS ACCOUNT PROGRAM.
        403. QUALIFIED LONG TERM CARE SAVINGS ACCOUNT PROGRAM.
        404. QUALIFIED LONG TERM CARE FLEXIBLE SPENDING ACCOUNT PROGRAM.
        405. OWNERSHIP.
        406. WITHDRAWALS.
        407. TAX TREATMENT.
        408. DEATH OF THE ACCOUNT HOLDER.
        409. CANCELLATION OR TRANSFER.
        410. RULES AND REGULATIONS.
  S  401.  DEFINITIONS.  FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  1. "ACCOUNT ADMINISTRATOR" MEANS ANY OF THE FOLLOWING:
  (A) A NATIONAL OR STATE CHARTERED BANK, A FEDERAL OR  STATE  CHARTERED
SAVINGS AND LOAN ASSOCIATION, A FEDERAL OR STATE CHARTERED SAVINGS BANK,
OR A FEDERAL OR STATE CHARTERED CREDIT UNION.
  (B) A TRUST COMPANY AUTHORIZED TO ACT AS A FIDUCIARY.
  (C)  AN  INSURANCE  COMPANY  LICENSED PURSUANT TO ARTICLE FORTY-ONE OR
FORTY-TWO OF THE INSURANCE LAW  OR  A  HEALTH  MAINTENANCE  ORGANIZATION
CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW.
  (D)  A  DEALER, SALESPERSON, OR INVESTMENT ADVISER REGISTERED PURSUANT
TO SECTION THREE HUNDRED FIFTY-NINE-E OF THE GENERAL BUSINESS LAW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD17110-01-0

A. 11133                            2

  (E) AN ADMINISTRATOR LICENSED PURSUANT TO  SECTION  TWO  THOUSAND  ONE
HUNDRED THIRTY-SIX OF THE INSURANCE LAW.
  (F)  A CERTIFIED PUBLIC ACCOUNTANT LICENSED PURSUANT TO SECTION SEVEN-
TY-FOUR HUNDRED FOUR OF THE EDUCATION LAW.
  (G) AN ATTORNEY ADMITTED TO PRACTICE LAW IN THIS STATE.
  (H) AN EMPLOYER, IF THE EMPLOYER HAS A SELF-INSURED HEALTH PLAN PURSU-
ANT TO THE PROVISIONS OF THE FEDERAL EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
  (I) AN EMPLOYER THAT PARTICIPATES IN  THE  QUALIFIED  LONG  TERM  CARE
SAVINGS ACCOUNT PROGRAM.
  2.  "ACCOUNT HOLDER" MEANS THE OWNER OF ANY ACCOUNT ESTABLISHED PURSU-
ANT TO THIS ARTICLE.
  3. "ELIGIBLE LONG TERM CARE EXPENSE" MEANS ANY OF THE FOLLOWING:
  (A) AN EXPENSE PAID BY THE ACCOUNT HOLDER FOR THE COST  OF  LONG  TERM
CARE  IN  A  LONG TERM CARE FACILITY FOR THE ACCOUNT HOLDER, THE ACCOUNT
HOLDER'S SPOUSE, THE ACCOUNT HOLDER'S PARENT OR ANOTHER PERSON FOR  WHOM
THE ACCOUNT HOLDER HAS AN INSURABLE INTEREST;
  (B) THE COST OF CARE PROVIDED IN AN INDIVIDUAL'S HOME WHEN THE ACCOUNT
HOLDER,  THE  ACCOUNT  HOLDER'S  SPOUSE,  THE ACCOUNT HOLDER'S PARENT OR
ANOTHER PERSON FOR WHOM THE ACCOUNT HOLDER  HAS  AN  INSURABLE  INTEREST
RECEIVING  THE  CARE  IS UNABLE TO PERFORM MULTIPLE BASIC LIFE FUNCTIONS
INDEPENDENTLY; OR
  (C) AN EXPENSE PAID BY THE ACCOUNT HOLDER FOR THE  COST  OF  QUALIFIED
LONG  TERM  CARE  SERVICES AS SUCH TERM IS DEFINED IN SUBDIVISION (C) OF
SECTION 7702B OF THE INTERNAL REVENUE CODE.
  4. "EMPLOYEE" MEANS THE INDIVIDUAL FOR WHOSE BENEFIT A QUALIFIED  LONG
TERM  CARE  SAVINGS  ACCOUNT  IS  ESTABLISHED  PURSUANT  TO SECTION FOUR
HUNDRED THREE OF THIS ARTICLE. "EMPLOYEE" INCLUDES A SELF-EMPLOYED INDI-
VIDUAL.
  5. "HIGHER DEDUCTIBLE" MEANS A DEDUCTIBLE OF NOT LESS THAN  ONE  THOU-
SAND  TWO  HUNDRED  DOLLARS AND NOT MORE THAN FIVE THOUSAND NINE HUNDRED
FIFTY DOLLARS FOR AN INDIVIDUAL AND NOT  LESS  THAN  TWO  THOUSAND  FOUR
HUNDRED  DOLLARS  AND NOT MORE THAN ELEVEN THOUSAND NINE HUNDRED DOLLARS
FOR A FAMILY FOR THE YEAR TWO THOUSAND TEN.   THIS MINIMUM  AND  MAXIMUM
SHALL  BE  INCREASED  ANNUALLY  BY THE SAME PERCENTAGE AS THE PERCENTAGE
INCREASE IN THE FEDERAL CONSUMER PRICE INDEX.
  6. "LONG TERM CARE INSURANCE PREMIUMS" MEANS PREMIUMS PAID FOR A  LONG
TERM  CARE  INSURANCE POLICY THAT OFFERS COVERAGE TO THE INDIVIDUAL, THE
INDIVIDUAL'S SPOUSE OR ANOTHER PERSON  FOR  WHOM  THE  TAXPAYER  HAS  AN
INSURABLE INTEREST.
  7.  "PARTICIPANT" MEANS AN INDIVIDUAL WHO ESTABLISHES A LONG TERM CARE
SAVINGS ACCOUNT BY ENTERING INTO A PARTICIPATION AGREEMENT OR ESTABLISH-
ING AN ACCOUNT WITH A FINANCIAL INSTITUTION WITH WHICH THE  COMMISSIONER
HAS AN AGREEMENT PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION
FOUR HUNDRED TWO OF THIS ARTICLE.
  8.  "QUALIFIED  HIGHER DEDUCTIBLE HEALTH PLAN" MEANS A HEALTH COVERAGE
POLICY, CERTIFICATE OR CONTRACT THAT PROVIDES FOR PAYMENTS  FOR  COVERED
BENEFITS  THAT EXCEED THE HIGHER DEDUCTIBLE AND THAT IS PURCHASED EITHER
BY AN EMPLOYER FOR THE BENEFIT OF AN  EMPLOYEE  FOR  WHOM  THE  EMPLOYER
MAKES  DEPOSITS  INTO A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT OR BY A
SELF-EMPLOYED OR OTHER INDIVIDUAL WHO MAKES DEPOSITS  INTO  A  QUALIFIED
LONG TERM CARE SAVINGS ACCOUNT.
  9.  "COMMISSIONER"  MEANS  THE COMMISSIONER OF THE STATE DEPARTMENT OF
HEALTH.
  S 402. LONG TERM CARE SAVINGS ACCOUNT PROGRAM. 1. (A) THE COMMISSIONER
SHALL SELECT THE ADMINISTRATOR OF THE PLAN FROM SUBMITTED PROPOSALS.  IF

A. 11133                            3

THE COMMISSIONER RECEIVES NO  ACCEPTABLE  RESPONSES  TO  A  REQUEST  FOR
PROPOSALS  FOR  AN  ADMINISTRATOR FOR THE PLAN BY DECEMBER THIRTY-FIRST,
TWO THOUSAND TEN,  THE  COMMISSIONER  MAY  ENTER  INTO  AGREEMENTS  WITH
STATE-CHARTERED  OR  FEDERALLY  CHARTERED BANKS, SAVINGS BANKS, BUILDING
AND LOAN ASSOCIATIONS, SAVINGS AND LOAN ASSOCIATIONS, OR CREDIT  UNIONS,
OR A SUBSIDIARY OF ANY SUCH ENTITY, TO RECEIVE CONTRIBUTIONS IN THE FORM
OF ACCOUNT DEPOSITS. THE COMMISSIONER MAY ADOPT AND PROMULGATE RULES AND
REGULATIONS TO CARRY OUT HIS OR HER DUTIES UNDER THIS PARAGRAPH.
  (B)  IF  AN  ADMINISTRATOR  IS SELECTED, PARTICIPANTS SHALL ENTER INTO
PARTICIPATION AGREEMENTS WITH THE COMMISSIONER. IF AN  ADMINISTRATOR  IS
NOT  SELECTED,  PARTICIPANTS MAY MAKE CONTRIBUTIONS TO AN ACCOUNT WITH A
FINANCIAL INSTITUTION WITH  WHICH  THE  COMMISSIONER  HAS  AN  AGREEMENT
PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION. A LIFETIME MAXIMUM OF ONE
HUNDRED SIXTY-FIVE THOUSAND DOLLARS MAY BE CONTRIBUTED BY A PARTICIPANT.
SUCH  AMOUNT  SHALL  BE INCREASED ANNUALLY BY THE SAME PERCENTAGE AS THE
PERCENTAGE INCREASE IN THE FEDERAL CONSUMER PRICE INDEX.
  2. (A) IF AN ADMINISTRATOR FOR THE  LONG  TERM  CARE  SAVINGS  ACCOUNT
PROGRAM IS SELECTED PURSUANT TO PARAGRAPH (A) OF SUBDIVISION ONE OF THIS
SECTION,  THE  LONG  TERM  CARE  SAVINGS  ACCOUNT PROGRAM TRUST SHALL BE
CREATED PURSUANT TO SECTION NINETY-NINE-T OF THE STATE FINANCE LAW.
  (B) THE COMMISSIONER SHALL BE THE TRUSTEE OF THE TRUST AND,  AS  SUCH,
RESPONSIBLE  FOR  THE  ADMINISTRATION,  OPERATION AND MAINTENANCE OF THE
PLAN AND SHALL HAVE ALL POWERS NECESSARY TO CARRY OUT AND EFFECTUATE THE
PURPOSES, OBJECTIVES AND PROVISIONS PERTAINING  TO  THE  ADMINISTRATION,
OPERATION  AND MAINTENANCE OF THE TRUST, EXCEPT AS PROVIDED IN PARAGRAPH
(C) OF THIS SUBDIVISION.
  (C) THE COMPTROLLER SHALL HAVE FIDUCIARY RESPONSIBILITY  TO  MAKE  ALL
DECISIONS  REGARDING THE INVESTMENT OF THE MONEY IN THE TRUST, INCLUDING
THE SELECTION OF ALL INVESTMENT OPTIONS AND THE APPROVAL OF ALL FEES AND
OTHER COSTS CHARGED TO TRUST ASSETS  EXCEPT  COSTS  FOR  ADMINISTRATION,
OPERATION  AND  MAINTENANCE  OF  THE  TRUST, PURSUANT TO THE DIRECTIONS,
GUIDELINES AND POLICIES ESTABLISHED BY THE COMMISSIONER.
  3. A QUALIFIED INDIVIDUAL AS DEFINED IN PARAGRAPH (A)  OF  SUBDIVISION
FOUR  OF  THIS SECTION MAY MAKE WITHDRAWALS AS A PARTICIPANT IN THE LONG
TERM CARE SAVINGS ACCOUNT PROGRAM TO PAY OR REIMBURSE ELIGIBLE LONG TERM
CARE EXPENSES.  A QUALIFIED INDIVIDUAL AS DEFINED IN  PARAGRAPH  (B)  OF
SUBDIVISION  FOUR  OF  THIS SECTION MAY MAKE WITHDRAWALS TO PAY OR REIM-
BURSE LONG TERM CARE INSURANCE PREMIUMS.
  4. FOR THE PURPOSES OF THIS SECTION, "QUALIFIED INDIVIDUAL" MEANS:
  (A) A PERSON WHO INCURRED LONG TERM CARE EXPENSES DURING  THE  TAXABLE
YEAR; OR
  (B) A PERSON WHO TURNED FIFTY YEARS OF AGE OR OLDER DURING THE TAXABLE
YEAR  WHO MADE PAYMENTS FOR LONG TERM CARE INSURANCE PREMIUMS DURING THE
TAXABLE YEAR.
  S 403. QUALIFIED LONG TERM CARE SAVINGS ACCOUNT PROGRAM. 1.  A  QUALI-
FIED  LONG TERM CARE SAVINGS ACCOUNT PROGRAM INCLUDES ALL OF THE FOLLOW-
ING:
  (A) THE PURCHASE BY AN EMPLOYER OR A SELF-EMPLOYED OR OTHER INDIVIDUAL
OF A QUALIFIED HIGHER DEDUCTIBLE HEALTH  PLAN  FOR  THE  BENEFIT  OF  AN
EMPLOYEE OR THE SELF-EMPLOYED OR OTHER INDIVIDUAL;
  (B) EITHER: (1) IN THE CASE OF AN EMPLOYEE, THE CONTRIBUTION ON BEHALF
OF AN EMPLOYEE INTO A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT BY HIS OR
HER  EMPLOYER OF ALL OR PART OF THE PREMIUM DIFFERENTIAL REALIZED BY THE
EMPLOYER BASED ON THE PURCHASE OF A QUALIFIED HIGHER  DEDUCTIBLE  HEALTH
PLAN  FOR  THE BENEFIT OF THE EMPLOYEE.  AN EMPLOYER THAT DID NOT PREVI-
OUSLY PROVIDE A HEALTH COVERAGE POLICY, CERTIFICATE, OR CONTRACT FOR HIS

A. 11133                            4

OR HER EMPLOYEES MAY CONTRIBUTE ALL OR PART OF  THE  DEDUCTIBLE  OF  THE
PLAN PURCHASED PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION; OR
  (2)  IN  THE CASE OF A SELF-EMPLOYED OR OTHER INDIVIDUAL, THE INDIVID-
UAL'S CONTRIBUTION INTO A QUALIFIED LONG TERM CARE  SAVINGS  ACCOUNT  OF
AMOUNTS TO PAY ELIGIBLE LONG TERM CARE EXPENSES; AND
  (C)  AN  ACCOUNT  ADMINISTRATOR  TO ADMINISTER THE QUALIFIED LONG TERM
CARE SAVINGS ACCOUNT FROM WHICH PAYMENT OF CLAIMS IS MADE.
  2. FOR TAX YEARS ENDING ON OR AFTER DECEMBER THIRTY-FIRST,  TWO  THOU-
SAND TEN, AN EMPLOYER, EXCEPT AS OTHERWISE PROVIDED BY STATUTE, CONTRACT
OR  A  COLLECTIVE  BARGAINING AGREEMENT, MAY OFFER A QUALIFIED LONG TERM
CARE SAVINGS ACCOUNT PROGRAM TO THE EMPLOYER'S EMPLOYEES. FOR TAX  YEARS
ENDING  ON  OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND TEN, A SELF-EM-
PLOYED OR OTHER INDIVIDUAL MAY ESTABLISH  A  QUALIFIED  LONG  TERM  CARE
SAVINGS ACCOUNT WITH AN ACCOUNT ADMINISTRATOR.
  3.  (A)  THE  ACCOUNT ADMINISTRATOR SHALL UTILIZE THE MONEYS HELD IN A
QUALIFIED LONG TERM CARE SAVINGS ACCOUNT FOR THE PURPOSE OF  REIMBURSING
AN EMPLOYEE'S ELIGIBLE LONG TERM CARE EXPENSES.
  (B)  IF  AN EMPLOYER MAKES CONTRIBUTIONS TO A QUALIFIED LONG TERM CARE
SAVINGS ACCOUNT PROGRAM ON A PERIODIC INSTALLMENT  BASIS,  THE  EMPLOYER
MAY  ADVANCE TO AN EMPLOYEE, INTEREST FREE, AN AMOUNT NECESSARY TO COVER
LONG TERM CARE EXPENSES INCURRED THAT EXCEED THE AMOUNT IN  THE  EMPLOY-
EE'S  QUALIFIED  LONG  TERM  CARE  SAVINGS  ACCOUNT  WHEN THE EXPENSE IS
INCURRED IF THE  EMPLOYEE  AGREES  TO  REPAY  THE  ADVANCE  FROM  FUTURE
INSTALLMENTS OR WHEN HE OR SHE CEASES TO BE AN EMPLOYEE OF THE EMPLOYER.
  S  404. QUALIFIED LONG TERM CARE FLEXIBLE SPENDING ACCOUNT PROGRAM. 1.
AN INDIVIDUAL WHO HAS BEEN REFUSED COVERAGE FOR LONG TERM CARE INSURANCE
MAY ESTABLISH A QUALIFIED LONG  TERM  CARE  FLEXIBLE  SPENDING  ACCOUNT,
SUBJECT TO THE REQUIREMENTS OF THIS SECTION.
  2.  A  QUALIFIED LONG TERM CARE FLEXIBLE SPENDING ACCOUNT IS A SAVINGS
ACCOUNT APPROVED BY THE COMMISSIONER FOR  AN  INDIVIDUAL  WHO  HAS  BEEN
SUBJECT  TO DENIAL OF LONG TERM CARE INSURANCE COVERAGE. AS USED IN THIS
ARTICLE, DENIAL OF LONG TERM CARE INSURANCE COVERAGE SHALL MEAN THAT:
  (A) THE INDIVIDUAL HAS APPLIED FOR AND  BEEN  DENIED  COVERAGE  BY  AT
LEAST TWO LONG TERM CARE INSURANCE PLANS WHICH HAVE BEEN APPROVED BY THE
INSURANCE DEPARTMENT FOR OPERATION IN THIS STATE, OR
  (B) THE INDIVIDUAL HAS BEEN CERTIFIED BY A PHYSICIAN TO BE UNINSURABLE
FOR  LONG  TERM CARE INSURANCE COVERAGE BY REASON OF HAVING A CONDITION,
DISEASE OR DISABILITY THAT PRECLUDES ANY CONSIDERATION FOR  ISSUANCE  OF
LONG TERM CARE INSURANCE COVERAGE.
  3.  THE  COMMISSIONER  SHALL  ESTABLISH  AND  MAINTAIN  A LIST OF SUCH
DISQUALIFYING CONDITIONS, DISEASES AND DISABILITIES. AN INDIVIDUAL SHALL
PROVIDE PROOF OF DENIAL OF LONG TERM CARE  INSURANCE  COVERAGE  OR  SUCH
CERTIFICATION  FROM A PHYSICIAN IN A FORM AND MANNER SATISFACTORY TO THE
COMMISSIONER.
  4. THE OWNER OF SUCH ACCOUNT MAY ANNUALLY CONTRIBUTE, OR HAVE CONTRIB-
UTED ON HIS OR HER BEHALF, AN AMOUNT OF UP TO TEN THOUSAND DOLLARS TO  A
QUALIFIED LONG TERM CARE FLEXIBLE SPENDING ACCOUNT. SUCH AMOUNT SHALL BE
INCREASED  ANNUALLY BY THE SAME PERCENTAGE AS THE PERCENTAGE INCREASE IN
THE FEDERAL CONSUMER PRICE INDEX.
  S 405. OWNERSHIP. 1. THE EMPLOYEE OR INDIVIDUAL WHO CONTRIBUTES OR  ON
WHOSE BEHALF MONIES ARE CONTRIBUTED TO A LONG TERM CARE SAVINGS ACCOUNT,
QUALIFIED  LONG  TERM  CARE  SAVINGS ACCOUNT OR QUALIFIED LONG TERM CARE
FLEXIBLE SPENDING ACCOUNT IS THE OWNER OF SUCH ACCOUNT.
  2. ANY OTHER PROVISION OF LAW OR  OF  THIS  ARTICLE  TO  THE  CONTRARY
NOTWITHSTANDING, THE AMOUNTS A LONG TERM CARE SAVINGS ACCOUNT, QUALIFIED
LONG  TERM  CARE  SAVINGS  ACCOUNT  OR QUALIFIED LONG TERM CARE FLEXIBLE

A. 11133                            5

SPENDING ACCOUNT SHALL NOT BE DEEMED A COUNTABLE ASSET PURSUANT TO  THIS
ARTICLE OF THE OWNER OF SUCH ACCOUNT.
  S 406. WITHDRAWALS. 1. (A) AN ACCOUNT HOLDER MAY MAKE WITHDRAWALS FROM
HIS  OR HER ACCOUNT ESTABLISHED PURSUANT TO THIS ARTICLE TO PAY OR REIM-
BURSE ELIGIBLE LONG TERM CARE EXPENSES. IN  THE  CASE  OF  A  LONG  TERM
SAVINGS PLAN PROGRAM, A QUALIFIED INDIVIDUAL AS DEFINED IN PARAGRAPH (B)
OF SUBDIVISION FOUR OF SECTION FOUR HUNDRED TWO OF THIS ARTICLE MAY MAKE
WITHDRAWALS TO PAY OR REIMBURSE LONG TERM CARE INSURANCE PREMIUMS.
  (B)  THE  ACCOUNT  HOLDER  SHALL  SUBMIT  DOCUMENTATION TO THE ACCOUNT
ADMINISTRATOR OF SUCH LONG TERM CARE EXPENSES OR INSURANCE PREMIUMS  DUE
OR  PAID  BY THE ACCOUNT HOLDER IN THE TAX YEAR AND THE ACCOUNT ADMINIS-
TRATOR SHALL PAY SUCH EXPENSES OR  PREMIUMS  OR  REIMBURSE  THE  ACCOUNT
HOLDER  FROM  THE  ACCOUNT  HOLDER'S ACCOUNT FOR SUCH ELIGIBLE LONG TERM
CARE EXPENSES OR PREMIUMS.
  2. (A) NOTWITHSTANDING PARAGRAPH (B) OF THIS SUBDIVISION  AND  SUBJECT
TO  PARAGRAPH  (C)  OF  THIS SUBDIVISION, AN ACCOUNT HOLDER MAY WITHDRAW
MONEY FROM HIS OR HER ACCOUNT ESTABLISHED PURSUANT TO THIS  ARTICLE  FOR
ANY  PURPOSE  OTHER  THAN  TO  PAY  OR REIMBURSE ELIGIBLE LONG TERM CARE
EXPENSES OR LONG TERM CARE INSURANCE PREMIUMS ONLY ON THE LAST  BUSINESS
DAY  OF  THE ACCOUNT ADMINISTRATOR'S BUSINESS YEAR. NOT MORE THAN THIRTY
DAYS AFTER AN ACCOUNT ADMINISTRATOR BEGINS TO ADMINISTER AN ACCOUNT, THE
ADMINISTRATOR SHALL NOTIFY IN WRITING EACH ACCOUNT HOLDER OF THE DATE OF
THE LAST BUSINESS DAY OF THE ADMINISTRATOR'S BUSINESS YEAR.
  (B) SUBJECT TO PARAGRAPH (C) OF THIS SUBDIVISION, IF AN ACCOUNT HOLDER
WITHDRAWS MONEY FOR ANY PURPOSE OTHER THAN TO PAY OR REIMBURSE  ELIGIBLE
LONG TERM CARE EXPENSES OR LONG TERM CARE INSURANCE PREMIUMS, ALL OF THE
FOLLOWING APPLY:
  (I) THE AMOUNT OF THE WITHDRAWAL IS INCOME FOR PURPOSES OF SECTION SIX
HUNDRED TWELVE OF THE TAX LAW.
  (II)  THE  ADMINISTRATOR  SHALL  WITHHOLD AND ON BEHALF OF THE ACCOUNT
HOLDER SHALL PAY A PENALTY TO THE DEPARTMENT  OF  TAXATION  AND  FINANCE
EQUAL TO TEN PERCENT OF THE AMOUNT OF THE WITHDRAWAL.
  (III)  INTEREST EARNED ON THE ACCOUNT DURING THE TAXABLE YEAR IN WHICH
A WITHDRAWAL UNDER THIS SECTION  IS  MADE  IS  INCOME  FOR  PURPOSES  OF
SECTION SIX HUNDRED TWELVE OF THE TAX LAW.
  (C)  THE  AMOUNT  OF A DISBURSEMENT OF ANY ASSETS OF AN ACCOUNT ESTAB-
LISHED PURSUANT TO THIS ARTICLE AS A RESULT OF A FILING  FOR  PROTECTION
UNDER TITLE ELEVEN OF THE UNITED STATES CODE BY AN ACCOUNT HOLDER IS NOT
CONSIDERED  A  WITHDRAWAL FOR PURPOSES OF THIS SECTION AND PARAGRAPH (B)
OF THIS SUBDIVISION SHALL NOT APPLY.
  S 407. TAX TREATMENT. 1. EXCEPT AS PROVIDED IN  SECTION  FOUR  HUNDRED
SIX  OF  THIS  ARTICLE,  PRINCIPAL CONTRIBUTED TO AN ACCOUNT ESTABLISHED
PURSUANT TO THIS ARTICLE AND MONEY PAID OR REIMBURSED  TO  AN  OWNER  OF
SUCH  AN  ACCOUNT  FOR  ELIGIBLE LONG TERM CARE EXPENSES SHALL BE EXEMPT
FROM TAXATION.
  2. ANY INDIVIDUAL WHO CONTRIBUTES TO A QUALIFIED LONG TERM CARE FLEXI-
BLE SPENDING ACCOUNT, IRRESPECTIVE OF WHETHER  SUCH  INDIVIDUAL  IS  THE
ACCOUNT HOLDER, SHALL BE ELIGIBLE FOR THE LONG TERM CARE INSURANCE CRED-
IT  PURSUANT TO SECTION ONE HUNDRED NINETY OR SIX HUNDRED SIX OF THE TAX
LAW.
  S 408. DEATH OF THE ACCOUNT HOLDER. UPON THE DEATH OF AN ACCOUNT HOLD-
ER, THE FOLLOWING SHALL APPLY:
  1. IF THE SURVIVING SPOUSE OF THE ACCOUNT HOLDER OR A CHRONICALLY  ILL
INDIVIDUAL  AS  PROVIDED  IN THIS ARTICLE ACQUIRES SUCH ACCOUNT HOLDER'S
INTEREST IN SUCH ACCOUNT BY REASON OF BEING THE  DESIGNATED  BENEFICIARY
OF THE ACCOUNT AT THE DEATH OF THE ACCOUNT HOLDER, SUCH ACCOUNT SHALL BE

A. 11133                            6

TREATED  AS  IF  THE  SPOUSE  OR SUCH CHRONICALLY ILL INDIVIDUAL WAS THE
OWNER OF SUCH ACCOUNT;
  2.  IF  A PERSON WHO IS NOT THE SURVIVING SPOUSE OF THE ACCOUNT HOLDER
OR WHO IS NOT CHRONICALLY ILL ACQUIRES THE INTEREST OF THE ACCOUNT HOLD-
ER IN AN ACCOUNT ESTABLISHED PURSUANT  TO  THIS  ARTICLE,  SUCH  ACCOUNT
SHALL  CEASE TO BE A LONG TERM CARE SAVINGS ACCOUNT, QUALIFIED LONG TERM
CARE SAVINGS ACCOUNT OR  QUALIFIED  LONG  TERM  CARE  FLEXIBLE  SPENDING
ACCOUNT AS OF THE DATE OF THE DEATH OF THE OWNER OF SUCH ACCOUNT, AND:
  (A)  IF  SUCH  PERSON IS NOT THE ESTATE OF SUCH BENEFICIARY, AN AMOUNT
EQUAL TO THE FAIR MARKET VALUE OF THE ASSETS IN  SUCH  ACCOUNT  ON  SUCH
DATE  SHALL  BE INCLUDIBLE IN SUCH PERSON'S GROSS INCOME FOR THE TAXABLE
YEAR WHICH INCLUDES SUCH DATE, PROVIDED  HOWEVER  THAT  SUCH  INCLUDIBLE
AMOUNT  SHALL  BE  REDUCED  BY  DISTRIBUTIONS  TO PAY FOR LONG TERM CARE
SERVICES PERMITTED PURSUANT TO THIS ARTICLE WHICH WERE INCURRED  BY  THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE, OR
  (B)  IF SUCH PERSON IS THE ESTATE OF SUCH BENEFICIARY, AN AMOUNT EQUAL
TO THE FAIR MARKET VALUE OF THE ASSETS IN  SUCH  ACCOUNT  ON  SUCH  DATE
SHALL  BE  INCLUDIBLE  IN  SUCH  BENEFICIARY'S GROSS INCOME FOR THE LAST
TAXABLE YEAR OF SUCH BENEFICIARY, PROVIDED HOWEVER THAT SUCH FAIR MARKET
VALUE SHALL BE REDUCED BY  DISTRIBUTIONS  TO  PAY  FOR  LONG  TERM  CARE
SERVICES  PERMITTED  PURSUANT TO THIS ARTICLE WHICH WERE INCURRED BY THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE.
  S 409. CANCELLATION OR TRANSFER. 1. (A) EACH  ACCOUNT  ESTABLISHED  OR
MAINTAINED UNDER THIS ARTICLE MAY BE CANCELED OR TRANSFERRED TO A SPOUSE
UPON THE TERMS AND CONDITIONS SET BY THE COMMISSIONER. IF THE ACCOUNT IS
CANCELED  OR  TERMINATED,  THE  ACCOUNT HOLDER MAY RECEIVE THE PRINCIPAL
AMOUNT OF ALL CONTRIBUTIONS MADE BY THE ACCOUNT HOLDER OR ON  BEHALF  OF
THE  ACCOUNT  HOLDER PLUS THE ACTUAL INVESTMENT EARNINGS ON THE CONTRIB-
UTIONS, LESS ANY LOSSES INCURRED ON THE CONTRIBUTIONS. AN ACCOUNT HOLDER
SHALL NOT RECEIVE MORE THAN THE FAIR MARKET VALUE OF HIS OR HER  ACCOUNT
ON THE APPLICABLE LIQUIDATION DATE.
  (B) THE TRANSFER OF THE INTEREST OF THE ACCOUNT HOLDER TO SUCH OWNER'S
SPOUSE  OR  FORMER SPOUSE UNDER A DIVORCE OR SEPARATION INSTRUMENT SHALL
NOT BE CONSIDERED  A  TAXABLE  TRANSFER  MADE  BY  SUCH  ACCOUNT  HOLDER
NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW OR OF THIS ARTICLE, AND THE
INTEREST SHALL, AFTER SUCH TRANSFER, BE TREATED  AS  AN  ACCOUNT  ESTAB-
LISHED UNDER THIS ARTICLE WITH RESPECT TO WHICH SUCH SPOUSE IS THE OWNER
OF SUCH ACCOUNT.
  2.  IN THE CASE OF A QUALIFIED LONG TERM CARE SAVINGS ACCOUNT PROGRAM,
IF (A) AN EMPLOYEE IS NO LONGER EMPLOYED BY  AN  EMPLOYER  THAT  PARTIC-
IPATES  IN  A  QUALIFIED LONG TERM CARE SAVINGS ACCOUNT PROGRAM, (B) THE
EMPLOYEE, NOT MORE THAN ONE HUNDRED EIGHTY DAYS AFTER HIS OR  HER  FINAL
DAY  OF EMPLOYMENT, TRANSFERS THE ACCOUNT TO A NEW ACCOUNT ADMINISTRATOR
OR REQUESTS IN WRITING TO THE FORMER  EMPLOYER'S  ACCOUNT  ADMINISTRATOR
THAT  THE  ACCOUNT  REMAIN WITH THAT ADMINISTRATOR, AND (C) THAT ACCOUNT
ADMINISTRATOR AGREES TO RETAIN THE ACCOUNT, THEN THE MONEY IN THE QUALI-
FIED LONG TERM CARE SAVINGS ACCOUNT MAY BE UTILIZED FOR THE  BENEFIT  OF
THE  EMPLOYEE  SUBJECT  TO THIS ARTICLE AND REMAINS EXEMPT FROM TAXATION
PURSUANT TO THIS ARTICLE. NOT MORE THAN THIRTY DAYS AFTER THE EXPIRATION
OF THE ONE HUNDRED EIGHTY DAYS, IF  AN  ACCOUNT  ADMINISTRATOR  HAS  NOT
ACCEPTED  THE FORMER EMPLOYEE'S ACCOUNT, THE EMPLOYER SHALL MAIL A CHECK
TO THE FORMER EMPLOYEE, AT THE EMPLOYEE'S LAST  KNOWN  ADDRESS,  FOR  AN
AMOUNT  EQUAL  TO THE AMOUNT IN THE ACCOUNT ON THAT DAY, AND THAT AMOUNT
IS SUBJECT TO TAXATION PURSUANT TO PARAGRAPH (B) OF SUBDIVISION  TWO  OF

A. 11133                            7

SECTION  FOUR  HUNDRED  SIX  OF  THIS  ARTICLE BUT IS NOT SUBJECT TO THE
PENALTY UNDER SUBPARAGRAPH  (II)  OF  SUCH  PARAGRAPH.  IF  AN  EMPLOYEE
BECOMES EMPLOYED WITH A DIFFERENT EMPLOYER THAT PARTICIPATES IN A QUALI-
FIED  LONG  TERM CARE SAVINGS ACCOUNT PROGRAM, THE EMPLOYEE MAY TRANSFER
HIS OR HER QUALIFIED LONG TERM CARE SAVINGS ACCOUNT TO THAT NEW  EMPLOY-
ER'S  ACCOUNT  ADMINISTRATOR.  A  SELF-EMPLOYED  OR OTHER INDIVIDUAL MAY
TRANSFER HIS OR HER QUALIFIED LONG TERM CARE SAVINGS ACCOUNT TO  ANOTHER
ACCOUNT  ADMINISTRATOR;  THE  MONEY  IN  THE ACCOUNT REMAINS EXEMPT FROM
TAXATION PURSUANT TO THIS ARTICLE.
  S 410. RULES AND REGULATIONS.  THE  COMMISSIONER,  AFTER  CONSULTATION
WITH  THE  COMPTROLLER  WHEN RELEVANT, SHALL ESTABLISH APPROPRIATE RULES
AND REGULATIONS TO GOVERN ACCOUNTS ESTABLISHED PURSUANT TO THIS ARTICLE,
INCLUDING BUT NOT LIMITED TO ELIGIBILITY AND APPROVAL, USE  OF  PROCEEDS
AND MANNERS OF PROOF.
  S  2.  Subdivision  1  of  section  190  of the tax law, as amended by
section 17 of part B of chapter 58 of the laws of 2004,  is  amended  to
read as follows:
  1.  General.  A  taxpayer  shall  be  allowed a credit against the tax
imposed by this article, other  than  the  taxes  and  fees  imposed  by
sections  one hundred eighty and one hundred eighty-one of this article,
equal to:
  (A) twenty percent of the premium paid during  the  taxable  year  for
long-term  care  insurance.  In  order  to  qualify for such credit, the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such
credit pursuant to section one thousand one  hundred  seventeen  of  the
insurance law; OR
  (B)  THE LESSER OF ONE THOUSAND FIVE HUNDRED DOLLARS OR TWENTY PERCENT
OF THE AMOUNT CONTRIBUTED TO A QUALIFIED LONG TERM CARE FLEXIBLE  SPEND-
ING ACCOUNT PURSUANT TO ARTICLE FOUR OF THE ELDER LAW.
  S  3.  Subsection  (aa)  of  section 606 of the tax law, as amended by
section 1 of part P of chapter 61 of the laws of  2005,  is  amended  to
read as follows:
  (aa)  Long-term care insurance credit. (1) Residents. A taxpayer shall
be allowed a credit against the tax imposed by this article equal to:
  (A) twenty percent of the premium paid during  the  taxable  year  for
long-term  care  insurance.  In  order  to  qualify for such credit, the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such
credit pursuant to section one thousand one  hundred  seventeen  of  the
insurance law; OR
  (B)  THE LESSER OF ONE THOUSAND FIVE HUNDRED DOLLARS OR TWENTY PERCENT
OF THE AMOUNT CONTRIBUTED TO A QUALIFIED LONG TERM CARE FLEXIBLE  SPEND-
ING ACCOUNT ESTABLISHED PURSUANT TO ARTICLE FOUR OF THE ELDER LAW.
  If  the  amount  of the credit allowable under this subsection for any
taxable year shall exceed the taxpayer's tax for such year,  the  excess
may  be  carried over to the following year or years and may be deducted
from the taxpayer's tax for such year or years.
  (2) Nonresidents and part-year residents. In the case of a nonresident
taxpayer or a part-year resident taxpayer, the credit  determined  under
this subsection shall be limited to the amount determined by multiplying
the  amount  of such credit by the New York source fraction as set forth
in paragraph three of subsection (e) of section six hundred one of  this
[article]  PART.   The credit as so limited shall be applied as provided
in paragraph one of this subsection.

A. 11133                            8

  S 4. Subsection (c) of section 612 of the tax law is amended by adding
two new paragraphs 39 and 40 to read as follows:
  (39) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY OR ON BEHALF OF THE
OWNER  OF  AN  ACCOUNT ESTABLISHED PURSUANT TO ARTICLE FOUR OF THE ELDER
LAW DURING SUCH OWNER'S LIFETIME TO SUCH AN ACCOUNT, AND SUBJECT TO  THE
RULES  ESTABLISHED  FOR  SUCH ACCOUNTS BY THE COMMISSIONER OF HEALTH, TO
THE EXTENT NOT DEDUCTIBLE OR ELIGIBLE FOR CREDIT FOR FEDERAL INCOME  TAX
PURPOSES,  PROVIDED,  HOWEVER,  THE EXCLUSION PROVIDED FOR IN THIS PARA-
GRAPH SHALL NOT EXCEED TEN THOUSAND DOLLARS FOR AN INDIVIDUAL.
  (40) DISTRIBUTIONS FROM AN ACCOUNT  ESTABLISHED  PURSUANT  TO  ARTICLE
FOUR OF THE ELDER LAW ON BEHALF OF THE OWNER OF SUCH ACCOUNT DURING SUCH
OWNER'S  LIFETIME, SUBJECT TO THE RULES ESTABLISHED FOR SUCH ACCOUNTS BY
THE COMMISSIONER OF HEALTH, TO THE EXTENT INCLUDIBLE IN GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
  S 5. The tax law is amended by adding a new  section  31  to  read  as
follows:
  S  31. RULES CONCERNING LONG TERM CARE ACCOUNTS. A TAXPAYER MAY ESTAB-
LISH A LONG TERM CARE  SAVINGS  ACCOUNT,  A  QUALIFIED  LONG  TERM  CARE
SAVINGS  ACCOUNT OR A QUALIFIED LONG TERM CARE FLEXIBLE SPENDING ACCOUNT
PURSUANT TO ARTICLE FOUR OF THE ELDER LAW. A  TAXPAYER  WHO  ESTABLISHES
SUCH  AN  ACCOUNT SHALL BE THE OWNER OF SUCH ACCOUNT. SUCH ACCOUNT SHALL
BE SUBJECT TO THE FOLLOWING RULES:
  1. A QUALIFIED LONG TERM  CARE  FLEXIBLE  SPENDING  ACCOUNT  SHALL  BE
ELIGIBLE  FOR  CREDITS  PURSUANT  TO SECTIONS ONE HUNDRED NINETY AND SIX
HUNDRED SIX OF THIS CHAPTER AND  ANY  ACCOUNT  ESTABLISHED  PURSUANT  TO
ARTICLE  FOUR OF THE ELDER LAW SHALL BE ELIGIBLE FOR DEDUCTIONS PURSUANT
TO SUBSECTION (C) OF SECTION SIX HUNDRED TWELVE  OF  THIS  CHAPTER.  ANY
INDIVIDUAL WHO CONTRIBUTES TO A QUALIFIED LONG TERM CARE FLEXIBLE SPEND-
ING  ACCOUNT,  IRRESPECTIVE  OF  WHETHER SUCH INDIVIDUAL IS THE OWNER OF
SUCH ACCOUNT, SHALL BE ELIGIBLE FOR THE LONG TERM CARE INSURANCE CREDITS
PURSUANT TO SECTIONS ONE HUNDRED NINETY AND  SIX  HUNDRED  SIX  OF  THIS
CHAPTER.
  2.  THE PROCEEDS OF AN ACCOUNT ESTABLISHED PURSUANT TO ARTICLE FOUR OF
THE ELDER LAW MAY BE USED TO PAY FOR ANY LONG TERM CARE EXPENSES PERMIT-
TED PURSUANT TO SUCH ARTICLE IN FULFILLMENT OF A PLEDGE BY THE OWNER  OF
SUCH  ACCOUNT  PURSUANT  TO  RULES  PROMULGATED  BY  THE COMMISSIONER OF
HEALTH. DISTRIBUTIONS FROM THE QUALIFIED LONG TERM CARE SAVINGS  ACCOUNT
TO  PAY  FOR SERVICES OR ITEMS NOT PERMITTED PURSUANT TO ARTICLE FOUR OF
THE ELDER LAW AND THE REGULATIONS PROMULGATED  BY  THE  COMMISSIONER  OF
HEALTH  SHALL  BE SUBJECT TO A PENALTY OF TEN PERCENT OF EVERY DOLLAR SO
EXPENDED DURING THE LIFETIME OF THE OWNER OF SUCH ACCOUNT. SUCH  PENALTY
SHALL BE LEVIED ONLY AGAINST THE OWNER OF SUCH ACCOUNT.
  3.  ANY  OTHER  PROVISION  OF LAW TO THE CONTRARY NOTWITHSTANDING, THE
PROVISIONS OF THIS SECTION RELATING  TO  CREDITS,  DEDUCTIONS,  CONTRIB-
UTIONS  OR  DISTRIBUTIONS  FROM ACCOUNTS ESTABLISHED PURSUANT TO ARTICLE
FOUR OF THE ELDER LAW SHALL NOT  APPLY  IF  THE  DISTRIBUTION  FROM  THE
ACCOUNT  IS  MADE AFTER THE DEATH OF THE OWNER OF SUCH ACCOUNT, PROVIDED
HOWEVER THAT:
  (A) IF THE SURVIVING SPOUSE OF THE OWNER OF SUCH ACCOUNT OR  A  CHRON-
ICALLY  ILL  INDIVIDUAL  AS  PROVIDED  BY  ARTICLE FOUR OF THE ELDER LAW
ACQUIRES SUCH OWNER'S INTEREST IN SUCH ACCOUNT BY REASON  OF  BEING  THE
DESIGNATED  BENEFICIARY  OF  THE ACCOUNT AT THE DEATH OF THE OWNER, SUCH
ACCOUNT SHALL BE TREATED AS IF THE SPOUSE OR SUCH CHRONICALLY ILL  INDI-
VIDUAL WERE THE OWNER OF SUCH ACCOUNT.
  (B)  IF A PERSON WHO IS NOT THE SURVIVING SPOUSE OF THE BENEFICIARY OR
WHO IS NOT CHRONICALLY ILL ACQUIRES THE INTEREST  OF  THE  OWNER  OF  AN

A. 11133                            9

ACCOUNT  ESTABLISHED  PURSUANT  TO  ARTICLE  FOUR OF THE ELDER LAW, SUCH
ACCOUNT SHALL CEASE TO BE A LONG TERM CARE  SAVINGS  ACCOUNT,  QUALIFIED
LONG  TERM  CARE  SAVINGS  ACCOUNT  OR QUALIFIED LONG TERM CARE FLEXIBLE
SPENDING  ACCOUNT  AS  OF  THE  DATE  OF  THE DEATH OF THE OWNER OF SUCH
ACCOUNT, AND:
  (I) IF SUCH PERSON IS NOT THE ESTATE OF SUCH  BENEFICIARY,  AN  AMOUNT
EQUAL  TO  THE  FAIR  MARKET VALUE OF THE ASSETS IN SUCH ACCOUNT ON SUCH
DATE SHALL BE INCLUDIBLE IN SUCH PERSON'S GROSS INCOME FOR  THE  TAXABLE
YEAR  WHICH  INCLUDES  SUCH  DATE, PROVIDED HOWEVER THAT SUCH INCLUDIBLE
AMOUNT SHALL BE REDUCED BY DISTRIBUTIONS  TO  PAY  FOR  LONG  TERM  CARE
SERVICES  PERMITTED  PURSUANT TO THIS SECTION WHICH WERE INCURRED BY THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE, OR
  (II) IF SUCH PERSON IS THE ESTATE OF SUCH BENEFICIARY, AN AMOUNT EQUAL
TO THE FAIR MARKET VALUE OF THE ASSETS IN  SUCH  ACCOUNT  ON  SUCH  DATE
SHALL  BE  INCLUDIBLE  IN  SUCH  BENEFICIARY'S GROSS INCOME FOR THE LAST
TAXABLE YEAR OF SUCH BENEFICIARY, PROVIDED HOWEVER THAT SUCH FAIR MARKET
VALUE SHALL BE REDUCED BY  DISTRIBUTIONS  TO  PAY  FOR  LONG  TERM  CARE
SERVICES  PERMITTED  PURSUANT TO THIS SECTION WHICH WERE INCURRED BY THE
DECEDENT BEFORE THE DATE OF THE DECEDENT'S DEATH AND PAID BY SUCH PERSON
WITHIN ONE YEAR AFTER SUCH DATE.
  (C) THE TRANSFER OF THE INTEREST OF THE OWNER OF SUCH ACCOUNT TO  SUCH
OWNER'S SPOUSE OR FORMER SPOUSE UNDER A DIVORCE OR SEPARATION INSTRUMENT
SHALL  NOT  BE  CONSIDERED A TAXABLE TRANSFER MADE BY SUCH OWNER OF SUCH
ACCOUNT NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR OF  THIS  ARTICLE,
AND  SUCH  INTEREST SHALL, AFTER SUCH TRANSFER, BE TREATED AS AN ACCOUNT
CREATED PURSUANT TO ARTICLE FOUR OF THE ELDER LAW WITH RESPECT TO  WHICH
SUCH SPOUSE IS THE OWNER OF SUCH ACCOUNT.
  S  6. The state finance law is amended by adding a new section 99-t to
read as follows:
  S 99-T. LONG-TERM CARE SAVINGS ACCOUNT  PROGRAM  TRUST.  1.  THERE  IS
HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE
COMMISSIONER  OF  TAXATION  AND  FINANCE AN ACCOUNT IN THE MISCELLANEOUS
SPECIAL REVENUE FUND TO BE KNOWN AS THE "LONG-TERM CARE SAVINGS  ACCOUNT
PROGRAM TRUST".
  2.  THE  LONG-TERM CARE SAVINGS ACCOUNT PROGRAM TRUST SHALL CONSIST OF
ALL MONEYS RECEIVED BY THE STATE PURSUANT TO SECTION FOUR HUNDRED TWO OF
THE ELDER LAW.
  3. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE MONEYS IN
SUCH ACCOUNT SHALL BE EXPENDED SOLELY FOR THE PURPOSE  DEFINED  PURSUANT
TO  SECTION  FOUR  HUNDRED  TWO OF THE ELDER LAW. UNDER NO CIRCUMSTANCES
SHALL THE MONEYS IN SUCH ACCOUNT BE COMMINGLED WITH ANY OTHER MONEYS.
  S 7. If any clause, sentence, paragraph, section or part of  this  act
shall  be adjudged by any court of competent jurisdiction to be invalid,
such judgment shall not affect, impair or invalidate the remainder ther-
eof, but shall be confined in its operation  to  the  clause,  sentence,
paragraph,  section or part thereof directly involved in the controversy
in which such judgment shall have been rendered.
  S 8. This act shall take effect on the ninetieth day  after  it  shall
have become a law and shall expire December 31, 2020 when upon such date
the provisions of this act shall be deemed repealed.